Context: The government must include coking coal in the list of critical minerals and provide special dispensation to enhance the domestic production of the key raw material for steel production, according to a Niti Aayog report.

Key highlights of the Report

• The Niti Aayog report titled "Enhancing Domestic Coking Coal Availability to Reduce the Import of Coking Coal"emphasizes the importance of coking coal for India's steel production and infrastructure development.

• Coking Coal as a Critical Mineral: The report recommends that the Indian government include coking coal in the list of critical minerals due to its central role in the cost of steel production.

• Coking coal constitutes approximately 42% of the cost of steel, which is essential for infrastructure development and employment generation in downstream industries.

• High Import Dependence: India’s import dependence on coking coal is about 85%, which is much higher than that of the EU (approximately 62%).Despite having significant domestic reserves of coking coal, India continues to rely heavily on imports, which raises concerns over national security and cost control for its steel industry.

• Underutilization of Domestic Reserves: India holds substantial geological reserves of coking coal, including 16.5 billion tonnes of medium coking coal. However, these reserves remain underutilized, with low capacity utilization in public sector washeries.

• Challenges in the Coking Coal Washing Process: The report points out that the capacity utilization of public sector coking coal washeries was below 32% in FY 2022-23, resulting in low yields of washed coal (35-36%). In contrast, private sector washeries performed better with higher yields and utilization rates. This discrepancy indicates inefficiencies that need to be addressed to optimize production.

Policy Recommendations

• The report advocates for the amendment of the Coal Bearing Areas (CBA) Act, 1957, to allow private sector participation in coal exploration and washing while maintaining public-private partnerships.

• The government should also enable policy changes to allow joint venture companies to sell byproducts from coking coal washeries (such as middling and tailing), which would help reduce costs for steel plants by passing on the profits from these byproducts.

• EU's Declaration of Coking Coal as Critical: The European Union has already declared coking coal as a critical raw material, recognizing its strategic importance for the steel industry and broader economic development.

• Economic and Strategic Importance of Coking Coal: Coking coal is vital for steel production, which is essential for India's infrastructure development and employment generation. By improving domestic production, India can reduce its import bills and achieve greater self-sufficiency, which aligns with its broader economic and energy security goals.

About Coking coal (or metallurgical coal)

• Coking coal (or metallurgical coal) is a bituminous coal with a suitable quality that allows the production of metallurgical coke.

• Coke is the main product of the high-temperature carbonisation of coking coal.

• It is an essential input material in steelmakingas it is used to produce pig iron in blast furnaces acting as the reducing agent of iron ore and as the support of the furnace charge. 

• Steel is cited as a strategic material in all industries related to the low-carbon transition. About 780 kg of coking coal is needed to produce 1 ton of steel.

• By-products of coke production such as tar, benzole, ammonia sulphate and sulphur are used for the manufacture of chemicals, as well as coke oven gas used for heat and power generation.

Application in steel production

• Coke/ metallurgical coke, which is created through the high-temperature carbonisation of coking coal, plays a crucial role in steelmaking.

• Coke is used in blast furnaces to produce pig iron, serving as both a reducing agent for iron ore and structural support for the furnace charge.

• The largest producers of coking coal in the world: China (676 million tons in 2022-62%), Australia (169 million tons in 2022-15%), Russia (96 million tons in 2022-9%), USA (55 million tons-5%), and Canada (34 million tons-3%).

Case of India

• Despite India’s vast reserves, reliance on imports remains at a staggering 85%.

• For example, India’s coking coal imports for the first six months of the current fiscal (April – Sept) were at a six-year-high at 29.6 million tonnes (mt) with shipments from Russia witnessing a substantial rise of over 200% during this period.

Critical Mineral

• Critical minerals are resources that are essential for the functioning of a nation's economy and are considered vital for national security.

• Government has released a list of 30 critical minerals for India. 

• These minerals are Antimony, Beryllium, Bismuth, Cobalt, Copper, Gallium, Germanium, Graphite, Hafnium, Indium, Lithium, Molybdenum, Niobium, Nickel, PGE, Phosphorous, Potash, REE,Rhenium, Silicon, Strontium, Tantalum, Tellurium, Tin, Titanium, Tungsten, Vanadium,Zirconium, Selenium and Cadmium.